By Ernie Harris, EVP of Corporate Development, Maestro Health
I know what you’re thinking, “This Ernie guy has been touting the virtues of private exchanges for years now so why is he saying they're dead? Did the model fail?” Of course not…otherwise I wouldn’t be writing this blog.
The past couple of months, I've taken time to reflect on last year's private exchange data. What does that tell us about the future? Why did those particular things happen and not others? Without further delay, here are my top conclusions for 2015 and predictions for 2016:
1. Private Exchanges are still ill defined in the minds of both the sellers and the buyers of such solutions.
While many continue to struggle with the “definition of a private exchange,” we at Maestro Health still use the term but are less worried about what you call our solutions and more interested in whether our solutions solve real problems in a demonstrable way.
2. The hype is over.
Employers, brokers and health plans now have a couple of years of actual data to review private exchanges, and much of the conjecture about what they can and can’t do is either being confirmed or invalidated. Sadly for many early adopters, there’s been more invalidation than confirmation.
3. All is not lost for those that have purchased a private exchange solution or those that are still considering it.
While many early claims have not been successfully proven, there are still real, tangible and quantifiable benefits to deploying a next-generation private exchange solution. (See predictions for more details)
4. Many early adopters are considering switching providers of private exchange technology.
Some already have. As early adopters have gained hands-on knowledge about what to expect from a successful private exchange solution, many are looking to innovative vendors that have taken the shortcomings of legacy models and evolved to become more streamlined, more agile, and more valuable.
5. The trend is set.
Demand for solutions to today’s post-ACA benefits world problems is stronger than ever. Whether you call it a private exchange, a modern enrollment platform or an omni-process-whatcha-ma-jig, it is clear that the trend is set – everyone will change the way they consider, select and engage with their benefits in the (very near) future.
1. The benefits of a post-ACA technology and service solution (notice I didn’t say private exchange?) for 2016 and beyond will be centered around:
Benefits Administration capabilities: Well beyond shopping and enrollment, do brokers have the technology and service chops to manage all segments, small, mid and large, throughout the year?
Billing, Allocation and Reconciliation: Not just aggregating bills from multiple parties but actually generating invoices FOR multiple parties in an accounting-based solution to provide accurate and timely invoices to groups and individuals and payments to multiple parties.
Consumer Engagement: Engagement is a word that is perhaps over-used at this point, but will your solution drive more than 1 visit per subscriber per year to the site? Will it provide value and support to employees year-round? How?
2. Consolidation will begin.
We’ve already seen some private exchange companies purchased by larger entities. In 2016, we will see the first round of providers either fold-up shop or be acquired by others.
3. The adoption curve will NOT bend this year.
We all know that every new idea has an adoption curve. Almost all of them bend like a hockey stick at some point. This shift is no different, but 2016 is not the year of the hockey stick – my money is on 2018.